Jack Smith

Born: April 6, 1938
Stamford, Connecticut
Chairman of the board, General Motors
Corporation

Jack Smith.

Reproduced by permission of Corbis Corporation (Bellevue).

For Jack Smith, the journey has taken place on a long and winding road
filled with bumps and potholes. So far, he has been able to guide General
Motors (GM) around the obstacles, taking it from near financial ruin in
1992 to a more efficiently run operation in 2002. Before the widely
publicized management and board shakeup at GM in 1992, few people outside
the automobile industry had heard of Smith. Since then, his face has
graced the front pages of newspapers and magazine covers nationwide. In
January of 1994, he was even seated beside First Lady Hillary Rodham
Clinton (1947-) as President Bill Clinton (1946-) delivered the annual
State of the Union address.

"At General Motors, we have made many unprecedented and
controversial changes since 1992, when we stared financial Armageddon in
the eye. However, despite the financial turnaround and all the other
progress, we are still not where we need to be on the journey."

Family Politics

John F. Smith Jr., known as Jack, was born on April 6, 1938, the second of
John and Eleanor Sullivan Smith's four children. The Smiths had
high expectations for their children, and disciplined them firmly. Perhaps
they had to since Jack, sisters Mary and Sally, and younger brother
Michael waged a near constant
battle of sibling rivalry. The family lived in a middle-class
neighborhood in Worcester, Massachusetts, where Eleanor Sullivan's
large Irish family was active in city politics. The Sullivans were well
represented on the city's police force, and Eleanor's
brother, Charles "Jeff" Sullivan, was mayor of Worcester in
the late 1940s. He later served as the lieutenant governor of
Massachusetts. Jack Smith often accompanied his uncle on whistle-stop
train tours, passing out handbills and attending campaign-related events.

Smith learned the concept of teamwork from his father, John, and paternal
uncles. John Smith, a quiet, patient man, was director of the
city's public health department, and co-owner with his two brothers
of Smithfield Famous Ice Cream, a chain of eight parlors in the area. Jack
Jr. learned the principles of business at the ice cream parlors, pitching
in to make ice cream and helping to run the various stores. As an adult,
Smith kept a replica of one of Smithfield's delivery trucks in his
office.

Jack Smith attended Blessed Sacrament Grammar School through the eighth
grade, then went to St. John Prep School, an elite private high school
dedicated exclusively to education. Between his studies and working after
school, he had little time for sports and extracurricular activities.
After graduating from high school, Smith attended the University of
Massachusetts, where he received his bachelor's degree in business
administration in 1960. He then went on to Boston University to pursue an
advanced business degree.

Climbs the Ranks at GM

Smith spent most of his GM career outside Detroit, Michigan. He joined GM
in 1961 as a payroll auditor at the Fisher Body plant in Framingham,
Massachusetts. Around that time he married Marie Holloway, his high-school
sweetheart, and commuted to Boston University to complete his
master's of business administration (MBA), which he received in
1965. Five years later Smith moved to the GM treasurer's office,
and by 1974 he had worked his way up to assistant treasurer. Smith was
transferred to Detroit in 1976, when he was promoted to assistant
comptroller; four years later, he became comptroller.

Wagoner: Always in the
Game

G. Richard Wagoner jr., or Rick Wagoner, as his associates know him, is
definitely more than a coach on the sidelines. As chief executive
officer (CEO) of General Motors (GM), the third largest company in the
world in 2002, he is always in the game, whether he is acting as a
coach, player, manager, or cheerleader. He took the helm of GM as it
moved out of the 1990s, a decade of turbulence, when the company was in
danger of financial collapse.

G. Richard Wagoner Jr.

Reproduced by permission of AP/Wide World Photos.

Wagoner was born on February 9, 1953, in Wilmington, Delaware, but grew
up in Richmond, Virginia. He entered North Carolina's Duke
University in 1971, where he played forward on the basketball team from
1971 to 1
972.
Although Wagoner did not believe he had what it took to play college or
professional basketball, he became a lifelong fan of the game,
especially rooting for the Duke Blue Devils. After graduating with his
bachelor's degree in economics in 1975, Wagoner immediately
entered Harvard University's business program, graduating in
1977.

After Wagoner earned his master's of business administration
(MBA), he was hired by the New York treasurer's office of General
Motors, where he worked as an analyst and was soon noticed for doing an
exceptional job. Beginning in 1981, he spent some time in Brazil as
treasurer of GM do Brasil. After a brief return to the United States,
Wagoner spent a year as a vice president and finance manager at GM
Canada in 1987. Remaining in Canada, he spent two years as director of
strategic business planning for Chevrolet-Pontiac-GM of the Canada
group. During this time, Wagoner learned every aspect of the automotive
business, although he remained primarily a financial expert.

Wagoner was promoted to vice president in charge of finance of GM Europe
in 1989 and was also named to GM's board of directors. Although
financial concerns remained at the core of his duties, he also showed
ability to soothe tensions between various factions in the company.
Wagoner smoothed over ruffled feathers among British, German, and Swiss
units, and got them to work together, instead of being at odds. In 1991,
Wagoner returned to South America when he was named president of GM do
Brasil. There, he focused on global purchasing, implemented cost-cutting
programs, and encouraged production to focus on more modern models of GM
cars. Wagoner accomplished so much that he was one of only two top
executives to get bonuses that year.

In the early 1990s, Wagoner came back to the United States. Although he
was only thirty-nine years old, he was named chief financial officer
(CFO) of GM in 1992. In 1994, Wagoner was promoted again, to president
of GM's North American operations. This made him second in
command at GM. The company faced numerous problems: the division was
losing money, market share was down, and GM made less per car than every
other major automotive manufacturer. Wagoner went on a cost-cutting
spree. He also reinvented how GM conducted business. Under his command,
North American operations broke even.

In 1998, Wagoner was named president and chief operating officer (COO)
of the newly created GM Automotive Operations. This combined the North
American operations with GM operations around the world. Wagoner worked
to streamline the company and enact more cost savings so it could
respond better to world markets. He also insisted that manufacturing
techniques be changed and updated. Wagoner had a plan to slowly update
every aspect of GM. He earned his highest promotion in 2000 when he was
named president and CEO of GM, the youngest person to hold this position
since the company was founded.

In 1982, Smith was named director of worldwide product planning, his first
GM job that allowed him to showcase his abilities beyond number crunching.
Smith took on the ambitious task of negotiating a joint venture between
General Motors and Japan's Toyota Motor Corporation. In 1984, the
deal was
closed and New United Motors Manufacturing Inc. was formed. The factory
was co-owned and operated by GM and Toyota, and was based in Fremont,
California. During negotiations, Smith visited several Toyota plants in
Japan. He became convinced that Toyota's production methods were
GM's ticket to the future.

Smith was promoted to president of GM of Canada in 1984, and in 1986
became chief of GM's passenger car division in Europe. The overseas
move helped contribute to Jack and Marie Holloway Smith's divorce.
The marriage's fate was sealed when Smith accepted the job as
GM's second-ranking executive in Europe, one of the most difficult
assignments at GM at the time. The couple divorced in 1986.

Smith benefited both professionally and personally during his years in
Europe. While there, he met Lydia Sigrist, a Swiss secretary for GM who
was also divorced and raising a teenage daughter. The attraction was
instant, but the two agreed they could not date as long as both of them
worked for the same company. Sigrist left GM and took on the task of
transforming the auto executive. She encouraged Smith to lose forty
pounds, took him hiking in the mountains, and helped him trade in his
rumpled dressing habits for more stylish suits and ties. The couple
married in August 1988, a few weeks after Smith was transferred back to
Detroit as executive vice president for international operations.

Reaches Top of Corporate Ladder

Two years later, Smith was named vice chairman of GM with responsibility
for international operations. Meanwhile, some members of the GM board of
directors, led by John Smale, an attorney and retired
Procter & Gamble Company
(see entry) CEO, were growing increasingly unhappy with GM's
management team under CEO Robert Stempel (1933-) and president Lloyd
Reuss. Becoming more impatient with GM's mounting losses in the
United States, Canada, and Mexico, they began demanding answers to
questions, such as why the cost-cutting measures that helped turn around
GM Europe could not be applied to North America.

In April of 1992, the directors demoted Reuss and other top GM executives,
and named Smith president and chief operating officer (COO). His appointed
task was to save GM's ailing North American operations, which lost
an estimated $11.4 billion in the previous two years. He became president
and CEO of GM on November 2, 1992, after former chairman and CEO Robert
Stempel resigned.

Smith's promotion surprised some, even though he had a strong track
record. He was known inside GM as the low-key, but capable executive who
turned the company's struggling European operations into the
company's crown jewel. In 2000, Smith was replaced as CEO, but
remained chairman of the board of directors. He was heralded as the man
who might be able to turn the manufacturing giant into a leaner and more
profitable company. His goal in the twenty-first century was to regain
some of the market share GM lost to Ford, DaimlerChrysler AG (see entry),
Toyota, and even Honda, in the 1980s and 1990s.

For More Information

Books

Madsen, Alan.
The Deal Maker: How William C. Durant Made General Motors.
New York: John Wiley & Sons, 1999.